U.S. PPI Preview U.S. PPI Preview: January PPI data is seen down -0.5% (median -0.4%) for the month following a -0.3% decline in December. The core index should be up 0.1% following a 0.3% increase in December. Price data has been depressed lately as collapsing oil prices have weighed on headlines, WTI oil prices plunged -19.4% in January. For the whole story, see our PPI preview.

Treasury Market Outlook: Treasuries extended declines in light trading Treasury Market Outlook: Treasuries extended declines in light trading with many Asian markets closing for New Year and Golden Week holidays. The 10-year yield has risen to 2.16%. Overseas sovereigns declined as well amid hopes Greece will ask for a loan extension by the end of the week, suggesting the government might accept a bailout (which isn't the same thing). U.K. Gilts were the underperformer on strong labor market data. Meanwhile, the BoE minutes showed signs of a division among the 9 voting members. Attention is also turning to the upcoming January 27, 28 FOMC minutes. Many in the markets are looking for a more upbeat assessment in general that could presage Chair Yellen's Monetary Policy Report next week and heighten the risk the word "patient" is removed at the March 17, 18 FOMC meeting, and keep a June rate hike on the table. Today's data includes January housing starts, January industrial production, January PPI, and the December TIC data (which was rescheduled from yesterday). The MBA reported mortgage applications dropped another 13.2% in the week ended February 13. Fed Governor Powell will speak on regulation.

SPDR S&P Oil and Gas Exploration and Production ETF volatility up, WTI at $53SPDR S&P Oil and Gas Exploration and Production ETF overall option implied volatility of 43 compares to its 26-week average of 35 according to Track Data, suggesting large price movement.

BoJ's Kuroda said there is no imminent need for more stimulus BoJ's Kuroda said there is no imminent need for more stimulus during his post policy meeting press conference. He remarked that, "I don't think there is any change in the price trend at the moment," tagging on his usual boilerplate comment that "if there is any change in the price trend, analysts won't hesitate to adjust policy." This confirms the prevailing no-extra-stimulus-for-now market view. There remains a soft consensus that the BoJ will take additional easing measures later in the year, although some Japanese politicians, and allegedly some BoJ board members (according to unnamed sources cited by Bloomberg recently), are concerned that more stimulus might bring unwelcome yen weakness.